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April 24, 2019, 5:35 a.m. EDT

Energy companies lead the retreat for European stocks

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By Dave Morris

European markets gave back much of Tuesday’s gains as strong earnings elsewhere could not offset oil companies’ retreat.

How did markets perform?

The Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP -0.10%  was down 0.1% to 390.9, after rising 0.2% on Tuesday.

Germany’s DAX /zigman2/quotes/210597999/delayed DX:DAX -0.12%   /zigman2/quotes/210223310/composite DAX +1.11%  was a bright spot despite gloomy economic data. The index rose to 12,256.9, up 0.2% after adding 0.1% Tuesday.

The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.20%  retreated 0.4% to 7,490.2, following Tuesday’s solid gain of nearly 0.9%.

The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.3569%  fell 0.1% to $1.2932, after declining 0.3% Tuesday.

In Italy, the FTSE MIB /zigman2/quotes/210598024/delayed IT:I945 -0.23%  fell 0.4% to 21,802.8, piling atop losses Tuesday of 0.3%.

France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -0.42%  reversed Tuesday’s gain of 0.2% with a loss of 0.2%, sinking to 5,578.

Crude oil backed off Tuesday’s highs. West Texas Intermediate (WTI)  declined 0.5% to $65.98/bbl, while the Brent benchmark  dropped 0.2% to $74.35.

What’s moving the markets?

Market followers struggled Wednesday morning to digest Tuesday’s record-high closes in U.S. equities. While earnings came in stronger than expected, analysts cautioned that the case for continued strength was not a slam dunk.

Jasper Lawler, head of research at London Capital Group, said: “The market was bracing itself for a pretty poor outpouring of numbers. Yet time and time again we are seeing firms beat this low bar and are providing strong forward guidance.

“There is a heavy focus right now on the health of corporate America and the US economy. Companies are surprising to the upside, the US GDP on Friday will also be a big test.”

Citing policy insiders, Reuters reported that China would likely hold off on further cuts to banks’ reserve requirement ratio (RRR) as the country’s central bankers gauged the health of the economy. Recent economic data flashed positive signals, bolstering the case for a wait-and-see stance. In other China news, trade talks with the U.S. are set to continue next week in Beijing, and the following week in Washington D.C.

A slow day for Brexit news, as U.K. Prime Minister Theresa May was reported to be targeting a parliamentary vote on her withdrawal agreement next week as discussions continued within the Conservative Party around whether to change the rules and force her out as leader. Talks between government and opposition Labour Party representatives again broke down, perhaps because their lack of progress was overshadowed by the lack of progress elsewhere.

In economic data, Germany’s IFO survey of business climate for April came in at 99.2, below the predicted 99.9 figure, sending both the euro and the DAX down slightly.

Which stocks are active?

German enterprise software company SAP SE /zigman2/quotes/203458330/delayed DE:SAP -0.31%  saw strong first quarter results thanks to take-up of its cloud computing services. New cloud bookings rose 32%, the company said. Shares climbed 6.8%.

Swiss bank Credit Suisse Group AG /zigman2/quotes/202835784/composite CS -0.24%  went from strength to strength by following last year’s annual profit, its first since 2014, with net profit (CHF749 million) and revenue (CHF 5.39 billion) beating expectations in the first quarter of 2019. The bank exited a three-year restructuring program in 2018. Its shares were up 2.9%.

German payments company Wirecard AG /zigman2/quotes/201427212/delayed DE:WDI -2.90% , which has been battered by an investigation into its accounting practices in Singapore, got a boost from Japanese telecommunications company SoftBank Group Corp. which plans to invest approximately €900 million in it. The investigation by an outside law firm said that while local staff may have committed crimes, these were not material to Wirecard’s financial position. Wirecard shares jumped a whopping 7%.

Though earnings season produced dramatic jumps in share prices for several European companies, a retreat in crude prices forced oil companies to give back some of Tuesday’s gains. Tullow Oil /zigman2/quotes/205079109/delayed UK:TLW -0.29%  fell 2.7%, 1&1 Drillisch AG /zigman2/quotes/208959611/delayed DE:DRI -1.08%  dropped 2.1%, Lundin Petroleum AB /zigman2/quotes/205930854/delayed SE:LUPE -0.23%  also dipped 2.1% and BP Plc  fell 1.6%.

/zigman2/quotes/210599654/delayed
XX : STOXX
393.08
-0.38 -0.10%
Volume: 0.00
Oct. 17, 2019 5:50p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
12,654.95
-15.16 -0.12%
Volume: 99,302
Oct. 17, 2019 6:30p
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/zigman2/quotes/210223310/composite
US : U.S.: Nasdaq
$ 26.90
+0.30 +1.11%
Volume: 529.00
Oct. 17, 2019 11:02a
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,182.32
+14.37 +0.20%
Volume: 1.09M
Oct. 17, 2019 4:59p
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/zigman2/quotes/210561263/realtime/sampled
US : Tullet Prebon
1.2844
-0.0046 -0.3569%
Volume: 0.0000
Oct. 18, 2019 12:39a
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/zigman2/quotes/210598024/delayed
IT : Borsa Italiana
22,375.67
-52.42 -0.23%
Volume: 0.00
Oct. 17, 2019 5:36p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
5,673.07
-23.83 -0.42%
Volume: 88,695
Oct. 17, 2019 6:05p
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/zigman2/quotes/203458330/delayed
DE : Germany: Frankfurt
116.24
-0.36 -0.31%
Volume: 1,799
Oct. 17, 2019 8:58p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€256,047
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/zigman2/quotes/202835784/composite
US : U.S.: NYSE
$ 12.29
-0.03 -0.24%
Volume: 2.41M
Oct. 17, 2019 6:30p
P/E Ratio
13.32
Dividend Yield
N/A
Market Cap
$30.90 billion
Rev. per Employee
$743,916
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/zigman2/quotes/201427212/delayed
DE : Germany: Frankfurt
118.95
-3.55 -2.90%
Volume: 25,815
Oct. 17, 2019 8:59p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€430,030
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/zigman2/quotes/205079109/delayed
UK : U.K.: London
207.20 p
-0.60 -0.29%
Volume: 3.66M
Oct. 17, 2019 4:35p
P/E Ratio
28.90
Dividend Yield
2.71%
Market Cap
£2.92 billion
Rev. per Employee
N/A
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/zigman2/quotes/208959611/delayed
DE : Germany: Frankfurt
31.22
-0.34 -1.08%
Volume: 596.00
Oct. 17, 2019 8:58p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
N/A
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/zigman2/quotes/205930854/delayed
SE : Sweden: Stockholm
kr 305.70
-0.70 -0.23%
Volume: 553,769
Oct. 17, 2019 5:29p
P/E Ratio
101.84
Dividend Yield
4.70%
Market Cap
kr87.03 billion
Rev. per Employee
N/A
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